Sometime in your life you wished you could work from home. We all have. Your tenants have too. The thing about your tenants however is that their home in also your property. Their business will therefore be your business. What should you do if your tenant is running a business out of your property? Should you stop it?
Finding Out About The Business
The first thing course is finding out about the business activity. This may not be as easy as it at first seems. Your tenant is unlikely to tell you of their new venture, nor will you be on your property every day to witness what is happening. What is more probable is that your other tenants are going to notice and either gossip or complain to you. You may also notice business activity after one of your routine property inspections or after a maintenance issue.
However you find out, you should be a bit concerned. Your tenant’s business could raise several issues, including:
- Strangers coming on your property.
- Disturbing your other tenant’s right to quiet enjoyment.
- Increased wear and tear on your property.
- Increased levels of liability if somebody slips and falls, or worse.
- Zoning and code enforcement issues. They will come after you, not the tenant.
- Restrictive covenant or homeowner association concerns.
Not All Businesses Are Alike
Should you discover that your tenant is running a business, I think a little investigation is necessary. Not all businesses are alike. Some will definitely create a nuisance while others are perfectly suited to being home based. There is a huge difference between your tenant selling used cars out of the back yard and your tenant conducting an Amazon resale business (I have had both happen btw). One, the used cars, is certainly going to be a problem while the other may not.
Either way it is your property. You set the rules.
The Type Of Business Matters
You might think that you should completely ban all business activities on your property. While you can do that, I am not so sure that is the best course of action. Some activities will not cause you or your tenants any problems. Think of telecommuting or designing websites.
Others could turn into a problem. That E-bay business could mean a lot of odds and ends and empty boxes lying around your property. While this type of activity is not something to stop outright, you may want to warn your tenant that it will need to stop if other tenants start complaining.
Other business activities will need to be stopped in their tracks. Selling cars off the back lawn are a no go. In fact, anything that will regularly lead to customers coming to my property is a no go, as is any business needing a sign or form of advertising directing people to my property. Not only may this be illegal, but it may increase your liability and will definitely disturb your tenants.
Protect Yourself
The best way, I think, to protect yourself is to place something in your house rules regarding home based businesses or commercial activities. We have a phrase that states that no home based business or commercial activity is allowed without our express permission. We do not therefore ban all activity but we can stop anything that may be or become a problem. After all, not every home based business will create problems and we want to be open to those tenants who may depend on such activities for their income.
Place a clause like the above in your lease or house rules if you do not already have one. If you discover your tenant is running a business out of your property, do not automatically ban it as you may lose a perfectly good tenant. Take some time to investigate and go from there.
